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CHAPTER 807. CAREER SCHOOLS AND COLLEGES PROPOSED RULES WITH PREAMBLE TO BE SUBMITTED TO THE TEXAS REGISTER. THIS DOCUMENT WILL HAVE NO SUBSTANTIVE CHANGES BUT IS SUBJECT TO FORMATTING CHANGES AS REQUIRED BY THE TEXAS REGISTER. ON SEPTEMBER 27, 2011, THE TEXAS WORKFORCE COMMISSION PROPOSED THE BELOW RULES WITH PREAMBLE TO BE SUBMITTED TO THE TEXAS REGISTER. Estimated Publication Date of the Proposal in the Texas Register: October 14, 2011 Estimated End of Comment Period: November 14, 2011 The Texas Workforce Commission (Commission) proposes amendments to the following sections of Chapter 807, relating to Career Schools and Colleges:

Subchapter A. General Provisions, §807.2 Subchapter D. Representatives, §807.51 Subchapter F. Instructors, §807.82 Subchapter H. Courses of Instruction, §807.134 Subchapter N. Cancellation and Refund Policy, §§807.261 - 807.264 Subchapter P. Complaints, §807.302

The Commission proposes the following new sections of Chapter 807, relating to Career Schools and Colleges:

Subchapter A. General Provisions, §807.8 Subchapter B. Certificates of Approval, §807.17 Subchapter D. Representatives, §807.54 Subchapter O. Records, §807.284

The Commission proposes the repeal of the following sections of Chapter 807, relating to Career Schools and Colleges:

Subchapter B. Certificates of Approval, §807.17 Subchapter O. Records, §807.284

The Commission proposes the repeal of the following subchapters of Chapter 807, relating to Career Schools and Colleges, in their entirety:

Subchapter S. Cease and Desist Orders, §§807.361 - 807.366 Subchapter T. Career Schools Hearings, §§807.381 - 807.395

The Commission proposes the following new subchapters of Chapter 807, relating to Career Schools and Colleges:

Subchapter S. Sanctions, §§807.351 - 807.353 Subchapter T. Cease and Desist Orders, §§807.361 - 807.366 Subchapter U. Career Schools Hearings, §807.381 and §§807.383 - 807.395

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PART I. PURPOSE, BACKGROUND, AND AUTHORITY PART II. EXPLANATION OF INDIVIDUAL PROVISIONS PART III. IMPACT STATEMENTS PART IV. COORDINATION ACTIVITIES PART I. PURPOSE, BACKGROUND, AND AUTHORITY Texas law charges the Commission with exercising jurisdiction and control of the oversight of career schools and colleges operating in Texas. The Commission's Career Schools and Colleges department (department) licenses and regulates most private postsecondary career schools and colleges that offer vocational training or continuing education to Texas residents. In Texas, the number of licensed career schools and colleges has grown from 418 schools on August 31, 2007, to 530 schools on May 31, 2011. In the three years between Fiscal Year 2007 (FY'07) and FY'10, the number of students enrolled in vocational programs has increased 33 percent. Consequently, the Commission currently regulates more than 500 career schools and colleges that provide vocational training to more than 180,000 students annually. Recent legislation has provided changes to regulatory requirements in several key areas. House Bill (HB) 736 requires improved and coordinated dissemination of online information regarding the operation and performance of career schools or colleges. House Bill 2784 strengthens refund provisions. In addition, HB 2538 specifies that student-level data is confidential and not subject to disclosure under Texas Government Code, Chapter 552. These proposed rules implement these bills passed by the 82nd Texas Legislature, Regular Session (2011). Texas law requires the Commission to administer the provisions of Texas Education Code, Chapter 132, enforce minimum standards for approval and regulation of career schools and colleges, and adopt policies and rules necessary for carrying out the responsibilities of Chapter 132. To fulfill this role, the Commission investigates complaints about schools, monitors schools to ensure regulatory compliance, arranges for the disposition of students affected by a school closure, and administers the Tuition Trust Account to pay tuition refunds to students when a school closes. In carrying out its regulatory duties, the department seeks to: --hold all businesses meeting the definition as a career school or college to meet consistent standards of quality, performance, and regulatory oversight; --provide consumer protection for Texas students; and --ensure students receive quality training to meet the needs of Texas employers. To support the Commission's ability to effectively and efficiently protect students, regulate career schools and colleges, and meet employer needs, and to implement recent legislation, the Commission proposes amendments in several key areas. The amendments enumerate the Commission's expectations and use of its regulatory authority in areas where recent violations and possible abuses have been identified. In addition, the amendments are intended to increase the transparency of the regulatory requirements and the overall performance of career schools and colleges. Further, to support the Commission's ability to effectively and efficiently respond to the needs of schools, students, and consumers and to provide direction to career schools and colleges regulated by the Commission, the Chapter 807 amendments:

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--require training of registered representatives on key compliance topics, such as legal and ethical advertising, solicitation and enrollment of students as outlined in Texas Education Code, Chapter 132, Career Schools and Colleges (the Act), administrative rules, and Commission policies and procedures;

--explain the consequences for violations of statute and rules by representatives, including assessment of sanctions up to and including revocation of approval to serve as a representative in Texas and establish a corrective action matrix for violations by representatives; --specify a student has the right to cancel enrollment and receive a full refund in certain circumstances;

--require schools to provide a tour on or before the first scheduled class day;

--modernize career school and college reporting by requiring electronic submission of all data and reports; clarify what data must be reported; specify what constitutes verifiable documentation; and add specific reference to the department's authority with regard to data monitoring and auditing; --specify the corrective actions to be taken if a career school program does not meet performance expectations; --allow for public dissemination of appropriate data reported by career schools and colleges, including student outcomes and regulatory and compliance information associated with a school regulated by the Commission; --clarify the complaint-handling process, including establishing a two-year time frame for filing a complaint; --specify that complaints must be filed within two years with an allowance for exceptions, and that there must be adequate information to support investigation; --develop a comprehensive strategy, in coordination with the Texas Higher Education Coordinating Board, to improve and coordinate dissemination of online information regarding the operation and performance of career schools or colleges (HB 736); --establish a penalty matrix for violations of career schools and colleges statutes and rules, with penalty amounts, not to exceed the $1,000 statutory cap, based on the seriousness of the violation; --provide information regarding refunds, when they may be required, and how to find provisions in statute (HB 2784); and --specify that student-level data is confidential and not subject to disclosure under Texas Government Code, Chapter 552 (HB 2538).

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PART II. EXPLANATION OF INDIVIDUAL PROVISIONS (Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

The Commission proposes the following amendments to Subchapter A: SUBCHAPTER A. GENERAL PROVISIONS

§807.2. Definitions New §807.2(8), formerly §807.382(1), defines "Agency" as the unit of state government established under Texas Labor Code, Chapter 301, that is presided over by the Commission and administered by the executive director to operate the integrated workforce development system and administer the unemployment compensation insurance program in this state as established under the Texas Unemployment Compensation Act, Texas Labor Code Annotated, Title 4, Subtitle A, as amended. The definition of Agency shall apply to all uses of the term in rules contained in this chapter. New §807.2(9), formerly §807.382(2), defines "appellant" as the party or the party's authorized hearing representative who files an appeal from an appealable determination or decision. New §807.2(12), formerly §807.382(3), defines "Commission" as the body of governance of the Texas Workforce Commission composed of three members appointed by the governor as established under Texas Labor Code §301.002 that includes one representative of labor, one representative of employers, and one representative of the public. The definition of Commission shall apply to all uses of the term in rules contained in this chapter. New §807.2(16), formerly §807.382(4), defines "date of notice" as the date the notice is received, unless good cause exists for the hearing officer to determine otherwise. New §807.2(17), formerly §807.382(5), defines "date of request of hearing" as the date on which the appellant or the hearing representative filed a written notice of appeal with the Agency by hand delivery, facsimile, or mail. If an appeal is mailed to the Agency, then the appeal is perfected as of the postmark date on the envelope containing the appeal request, unless good cause exists for the hearing officer to determine otherwise. If an appeal is delivered by hand or facsimile after 5:00 p.m., the date of request shall be the next day. New §807.2(21), formerly §807.2(16), defines "good reputation" and clarifies what is considered when determining whether school personnel meet the requirement to be of good reputation. New §807.2(22), formerly §807.382(6), defines "hearing" as an informal, orderly, and readily available proceeding held before an impartial hearing officer. A party or hearing representative may present evidence to show that the Agency's determination should be reversed, affirmed, or modified. New §807.2(23), formerly §807.382(7), defines "hearing officer" as an Agency employee designated to conduct impartial hearings and issue final administrative decisions.

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New §807.2(24), formerly §807.382(8), defines "hearing representative" as any individual authorized by a party to assist the party in presenting the party's appeal. A hearing representative may be legal counsel or another individual. Each party may have a hearing representative to assist in presenting the party's appeal. New §807.2(27), formerly §807.382(9), defines "party" as the person or entity with the right to participate in a hearing authorized in applicable statute or rule. New §807.2(29) defines "refund" as the completed payment of a refund such that the refund instrument has been negotiated or credited into the proper account(s). New §807.2(32) defines "sanctions" as administrative or civil actions, including, but not limited to, penalties, revocation of approvals, or cease and desist orders taken by the Agency against an entity in response to violations of the Act or this chapter. New §807.2(43) amends the definition of "tour" to specify that a tour is a "required" and "in-person" inspection of the facilities and equipment pertaining to a course of instruction. Certain paragraphs in this section have been renumbered to reflect additions or deletions. §807.8. Confidentiality of Information New §807.8 stipulates that student-specific information obtained from or about any school by the Agency is confidential information and not releasable, and is not public information under Texas Government Code, Chapter 552; however, it may be compiled and reported to the public at a summary level that does not include personally identifiable information about a student or identify a student through combination with other publically available information. The passage of HB 2538 clearly enumerated that student-level data held by the Agency is confidential and not subject to disclosure under Texas Government Code, Chapter 552.

The Commission proposes the following amendments to Subchapter B: SUBCHAPTER B. CERTIFICATES OF APPROVAL

Section 807.17, relating to Penalties and Sanctions Regarding Schools, is repealed and the contents are relocated to new §807.352, relating to Sanctions.

§807.17. Penalties and Sanctions Regarding Schools

New §807.17 states that if a career school or college, as defined in the Act, operates, solicits, or enrolls students for, or conducts any course of instruction before receiving a certificate of approval or an exemption from the Agency, the Agency may:

§807.17. Unlicensed Schools

(1) assess a penalty; (2) require full refunds to all students; or (3) issue a cease and desist order.

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The Commission proposes the following amendments to Subchapter D: SUBCHAPTER D. REPRESENTATIVES

Section 807.51(c) is amended to clarify that the release from obligations to which students are entitled if solicited or enrolled by an unregistered representative applies only to obligations to the school.

§807.51. Representative Requirements

New §807.51(d) states that the Agency shall require representatives registered with the Agency to take training that covers the Act and Commission rules relative to representatives, admissions, advertising, and any other topics as required by the Agency to support the legal and ethical solicitation and enrollment of students.

New §807.54 provides, consistent with §132.059 and §132.151 of the Texas Education Code, that representatives may be held liable for violations of statute and Commission rules, policies, and procedures notwithstanding §807.51(b). Further, the section explains that such violations may result in sanctions up to and including revocation of the individual's status as an approved career school and college representative in Texas in accordance with the matrix of corrective actions and violations, as identified in statute and rule, set forth in this section.

§807.54. Representative Compliance

The Commission proposes the following amendments to Subchapter F: SUBCHAPTER F. INSTRUCTORS

Section 807.82(c) removes the term "penalties" and replaces it with the term "sanctions" to align with new §807.2(32), which includes penalties in the definition of sanctions.

§807.82. Temporary Instructors

Section 807.82(f) removes the term "penalties" and replaces it with the term "sanctions" to align with new §807.2(32), which includes penalties in the definition of sanctions, and to clarify that sanctions and refunds can both be applied.

The Commission proposes the following amendments to Subchapter H: SUBCHAPTER H. COURSES OF INSTRUCTION

Section 807.134 replaces the title "Penalties Relating to Courses of Instruction" with "Sanctions Relating to Courses of Instruction," to align with new §807.2(32), which includes penalties in the definition of sanctions.

§807.134. Sanctions Relating to Courses of Instruction

Section 807.134(e)(3) clarifies that false, misleading, or deceptive advertising on a school's behalf includes using words that are "commonly associated with" a degree other than degrees approved by the Texas Higher Education Coordinating Board.

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The Commission proposes the following amendments to Subchapter N: SUBCHAPTER N. CANCELLATION AND REFUND POLICY

Section 807.261 replaces the title "Right to Cancel after Tour" with "Requirement for Tour" to more closely align with the contents of this section.

§807.261. Requirement for Tour

New §807.261(a) adds that, notwithstanding subsection (b) of this section, schools are required to provide a tour on or before the first scheduled class day. Section 807.261(c) clarifies that students must sign and date an acknowledgement form certifying the completion of the tour. The section removes the requirement for a school to provide a potential student who was not given an opportunity to tour the school before signing an enrollment contract an additional three days, excluding Saturdays, Sundays, and legal holidays, following a tour to cancel enrollment and request a full refund and release from all obligations. New §807.261(a) clarifies that schools are required to provide a tour on or before the first scheduled class day. Certain subsections in this section have been relettered to reflect additions or deletions. §807.262. Completion of Refund Section 807.262 replaces the title "Consummation of Refund" with "Completion of Refund" to provide more precise terminology. Section 807.262(a) - (c) also replaces the terms "consummation" and "consummate" with "completion" and "complete," respectively, to provide more precise terminology.

Section 807.263(a) sets forth the critical types of violations--mentioned elsewhere in this chapter but not previously detailed in this section, that entitle a student to a refund. Remittance of refunds does not limit a school's liability for other sanctions available to the Agency under the Act and Commission rules.

§807.263. Refund Requirements

Section 807.263(a)(1)(A) - (C) is reorganized, and states that students are entitled to a full refund for classes attended if the school does not provide a class with: (A) an approved instructor; (B) an instructor for whom an application has been properly submitted to the Agency; or (C) a temporary instructor for whom the school submitted notice to the Agency. New §807.263(a)(2) - (6) adds that students are entitled to a full refund for classes attended if the school: (2) fails to maintain the instructors, facilities, equipment, or courses of instruction on the basis

of which Agency approval was issued or student enrollment was obtained; (3) violates any provision of this chapter in the process of soliciting and enrolling the student;

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(4) fails to adhere to applicable academic, attendance, and refund policies that meet state requirements and apply to the course enrolled in, as published at the time of the student’s enrollment in the course;

(5) fails to furnish the student, upon satisfactory completion of the program, with a certificate of completion. A school may withhold the transcript or certificate until the student has paid outstanding financial obligations to the school; or

(6) does not have course approval or the required certificate of approval from the Agency. Section 807.263(b) removes the phrase "a class has no instructor for" and replaces it with the phrase "any of the violations in subsection (a)(1) - (6) of this section" to specify that if the violations apply to more than one class period, students are entitled to a full refund for each such class attended. Section 807.263(e) specifies that for schools other than seminars, a student may cancel enrollment, request a full refund, and request a release from any obligations to the school within the first three scheduled class days. New §807.263(f) provides guidance on where additional information may be obtained regarding refunds due to a student who withdraws or is discontinued from a program prior to completion. The new subsection states that the refund is calculated in accordance with the school's policy, which must be at least equivalent to the refund policy outlined in §132.061 of the Act. The passage of HB 2784 revised the refund policy required for residence programs and synchronous distance education programs detailed in §132.061(4) of the Act. This policy is simpler to calculate and more advantageous to students than the previous policy, basing refunds on a straight proportion of the remaining portion of the clock hours for which the student has been charged, up to the point at which 75 percent of the period has been completed.

Section 807.264 removes the term "consummated" and replaces it with "completed" to provide more precise terminology.

§807.264. Penalties Relating to Refunds

The Commission proposes the following amendments to Subchapter O: SUBCHAPTER O. RECORDS

Section 807.284 is repealed. It contains out-of-date references and lacks information on a number of issues important to the reporting of data by schools to the Agency and the Agency's use and reporting of the data.

§807.284. Employment Records

New §807.284 sets forth the data reporting requirements and report formats necessary for the Agency to administer the Act and this chapter. The language provides direction and allows for better information to the public and the Agency. It also provides flexibility to accommodate future changes in technology. Some of the provisions contained in new §807.284 are in response to the passage of HB 736.

§807.284. Reporting

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New §807.284(a) requires schools to report to the Agency, as directed, the facts and information about their programs and operations deemed necessary for the proper administration of the Act and any rules adopted under the Act. New §807.284(a)(1)(A) - (C) specifies that the data to be reported by a school shall include student enrollment information for all programs; completion, employment, and job placement information for all programs approved for an occupational objective; and any other information that is required. New §807.284(a)(2) requires schools to submit the required data to the Agency on or before the specified date. New §807.284(a)(3) mandates that schools shall provide the data in an electronic format prescribed by the Agency unless a different format is approved in writing by the Agency. New §807.284(a)(4) allows that, when good cause is shown, the Agency may extend the deadline for submission of the data required under this section; however, the extension shall be effective only if authorized in writing. New §807.284(a)(5) states that the Agency may require schools to store on file the verifiable documentation supporting the data reported and make it available to the Agency upon request. New §807.284(b) states that the Agency shall develop data monitoring and audit protocols for the data reported under subsection (a) of this section for use in assessing the accuracy of the information. New §807.284(c) states that the Agency may impose penalties or sanction, or both, for failure to submit data under subsection (a) of this section by the due dates required, or for submission of data that is shown to contain inaccuracies. New §807.284(d) establishes the corrective actions that will be taken for career school programs that do not meet the minimum employment rate as referenced in §807.131(b). New §807.284(d)(1) states that a program that does not meet the minimum employment rate for the first year will be required to develop and submit a performance improvement plan that is determined acceptable by the Agency. New §807.284(d)(2) states that a program that does not meet the minimum employment rate for the second consecutive year, but has shown at least a 50% improvement from the previous year and toward the minimum employment rate, will be required to submit modifications to the performance improvement plan that are determined acceptable by the Agency. For example, in order to fall in this category, a program reporting a 20% employment rate in year one must report at least a 40% employment rate in the subsequent year if the employment minimum is 60%. New §807.284(d)(3)(A) - (B) states that a program that does not meet the minimum employment rate for the second consecutive year and that has not shown at least a 50% improvement toward

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the minimum employment rate will result in conditions placed on the school's certificate that require submission of a modified performance improvement plan and the suspension of new enrollment of students in the program who are funded by Local Workforce Development Board–allocated funds. Thus, if the program described in subsection (d)(2) did not meet at least a 40% employment rate, the program would fall in this corrective action category. New §807.284(d)(4) states that the Agency will revoke its approval of a program that does not meet the minimum employment rate for three consecutive years. New §807.284(e)(1) - (2) provides that the Agency shall publish on its website information compiled from: (1) data reported under subsection (a) of this section; and (2) any other information about schools and programs that is deemed appropriate and useful to

the public and that: (A) assists a person in deciding whether to enroll in a school or in identifying or choosing

which postsecondary institution, school, or college to attend; and (B) addresses regulatory compliance and performance of schools. New §807.284(e)(3) provides that the Agency, to the extent practical, shall present the published information in a manner that is consistent among institutions, schools, and colleges; easy to understand; and accessible to the public. Certain subparagraphs in this section have been relettered to reflect additions or deletions.

The Commission proposes the following amendments to Subchapter P: SUBCHAPTER P. COMPLAINTS

New §807.302(a) ensures that the Agency shall investigate or refer to other authorities with jurisdiction to investigate all complaints received about licensed and unlicensed schools.

§807.302. Complaints and Investigations

Section 807.302(b) removes the phrase "may investigate a complaint about a school." New §807.302(a) clarifies the Commission's intent to respond to complaints about licensed and unlicensed schools. Section 807.302(b)(5) adds "the feasibility of investigations" as a factor the Agency may consider in determining the extent of investigation needed. Section 807.302(c) adds language addressing the adequacy of information about a violation that may be required in order to initiate a complaint investigation. It also stipulates that, notwithstanding subsection (a) of this section, anonymous complaints will not be investigated, but rather reviewed for potential action. New §807.302(d) stipulates that a complaint is timely if it has been filed with the Agency while a student who files the complaint is enrolled or within two years of the date the student withdraws,

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terminates, or graduates from the program that is the subject of the complaint unless good cause exists. Good cause includes, but is not limited to, fraud. Certain subsections and paragraphs in this section have been relettered and renumbered to reflect additions or deletions. SUBCHAPTER S. SANCTIONS The Commission proposes new Subchapter S: New Subchapter S centralizes the rules regarding sanctions. Specifically, the new subchapter addresses the requirements for notice and administration of sanctions, sanctions for violations, and the assessment of administrative penalties in accordance with a matrix contained in the rule.

New §807.351(a) clarifies the Agency's authority under §132.152 of the Act to impose administrative penalties or other sanctions on an entity for violations of §132.151 of the Act or this chapter.

§807.351. Notice and Administration of Sanctions

New §807.351(b) provides that the Agency shall serve notice of a sanction, with determination of the violation on which it is based, by both U.S. mail and certified mail, return receipt requested, mailed to the owner's address of record as listed on the application for certificate of approval. Notice is presumed received five days from the date it is mailed by the Agency unless there is other evidence of receipt.

New §807.351(c)(1) - (3) stipulates that in imposing administrative penalties or other sanctions, the Agency shall consider all the factors that it deems relevant, including, but not limited to, the following: (1) The amount of administrative penalty or level of sanction necessary to ensure immediate and

continued compliance with statutes and regulations; (2) The conduct of the entity in taking all reasonable steps or procedures necessary and

appropriate to comply with statutes and regulations and to correct the violation; and (3) The entity's prior violations of statutes, regulations, or orders administered, adopted, or

issued by the Commission. New §807.351(d) provides that notwithstanding subsections (a) - (c) of this section, the Commission shall order refunds pursuant to applicable statute and rules.

New §807.352(a)(1) - (17) retains the provisions of repealed §807.17, and sets forth sanctions for violations, which may include:

§807.352. Sanctions

(1) administrative penalties outlined in §807.353; (2) collecting a late renewal fee from the school; (3) denying the school's application for a certificate of approval; (4) revoking the school's certificate of approval; (5) placing conditions on the school's certificate of approval; (6) suspending the admission of students to the school or a program;

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(7) denying a program approval; (8) revoking a program approval; (9) denying or revoking approval of an owner, school director, instructor, or other staff member

whose approval may be required; (10) denying, suspending, or revoking the registration of the school's representatives; (11) assessing a late refund penalty; (12) charging the school an investigation fee to resolve a complaint against the school; (13) charging the school interest and penalties on late payments of fee installments; (14) applying for an injunction against the school; (15) asking the Attorney General to collect a civil penalty from any person who violates the Act

or this chapter; (16) ordering a peer review of the school; and (17) issuing a cease and desist order to an unlicensed school. New §807.352(b) stipulates that notwithstanding subsection (a)(1) - (17) of this section, the Agency shall order refunds pursuant to applicable statutes and rules.

Section 132.152 of the Texas Education Code authorizes the Commission to assess an administrative penalty in an amount not to exceed $1,000 and requires the Commission to consider the seriousness of the violation in determining the amount of the penalty. Consistent with this authority and direction, requirements for assessing administrative penalties for violations are established, including the use of a penalty matrix, which establishes penalty amounts for violations of career schools and colleges statutes and rules, based on the seriousness of the violation and potential harm to consumers, up to the $1,000 statutory cap. Consideration is given to the number of instances of violations and whether a violation is a repeat violation.

§807.353. Administrative Penalties

New §807.353(a) - (e) details requirements for assessing administrative penalties for violations: (a) Unless otherwise provided by statute, an administrative penalty shall not exceed $1,000 for

each instance of a violation. (b) The administrative penalty for repeat violations shall be up to the maximum penalty amount

of $1,000 per violation. (c) The total amount of an administrative penalty shall be calculated as the product of the

penalty dollar amount and the number of instances of violation. (d) The assessment of an administrative penalty shall not preclude the Agency from

administering other sanctions, up to and including revocation of a school's certificate of approval.

(e) The Agency shall, for purposes of determining and assessing an administrative penalty, use the penalty matrix set out in this section, which assigns a penalty for violations identified in statute and rule, based on the seriousness of the violation or the potential to cause harm to consumers. The absence of a listing for a specific violation in the matrix does not preclude the Agency from assessing an administrative penalty.

SUBCHAPTER S. CEASE AND DESIST ORDERS The Commission proposes the repeal of Subchapter S in its entirety. The contents of this subchapter are proposed as new Subchapter T.

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§807.361. Statement of Charges and Notice of Hearing on Cease and Desist Orders §807.362. Contents of Statement of Charges and Notice of Hearing §807.363. Service of Statement and Charges and Hearing Notice for the Issuance of Cease and

Desist Orders §807.364. Ex Parte Consultations §807.365. Hearing Decision and Final Review by the Commission §807.366. Cease and Desist Order SUBCHAPTER T. CAREER SCHOOLS HEARINGS The Commission proposes the repeal of Subchapter T in its entirety. Section 807.382, Definitions, is proposed as new in §807.2; the remaining sections are proposed as new Subchapter U. §807.381. Purpose §807.382. Definitions §807.383. Information on Right of Appeal §807.384. Request for Hearing §807.385. Setting of Hearing §807.386. Hearing Officer Independence and Impartiality §807.387. Hearing Procedures §807.388. Postponements, Continuances, and Withdrawals §807.389. Evidence §807.390. Ex Parte Communications §807.391. Change in Determination §807.392. Hearing Decision §807.393. Motion for Reopening §807.394. Motion for Rehearing §807.395. Finality of Decision To consolidate the definitions in this chapter in one section, §807.382, Definitions, is proposed as new in §807.2, as follows: Section 807.382(1), the definition of "Agency," is new §807.2(8). Section 807.382(2), the definition of "appellant," is new §807.2(9). Section 807.382(3), the definition of "Commission," is new §807.2(12). Section 807.382(4), the definition of "date of notice," is new §807.2(16). Section 807.382(5), the definition of "date of request of hearing," is new §807.2(17). Section 807.382(6), the definition of "hearing," is new §807.2(22). Section 807.382(7), the definition of "hearing officer," is new §807.2(23). Section 807.382(8), the definition of "hearing representative," is new §807.2(24). Section 807.382(9), the definition of "party," is new §807.2(28). SUBCHAPTER T. CEASE AND DESIST ORDERS The Commission proposes new Subchapter T as follows: New Subchapter T, regarding Cease and Desist Orders, retains the provisions of repealed

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Subchapter S, Cease and Desist Orders, in its entirety: §807.361. Statement of Charges and Notice of Hearing on Cease and Desist Orders §807.362. Contents of Statement of Charges and Notice of Hearing §807.363. Service of Statement and Charges and Hearing Notice for the Issuance of Cease and

Desist Orders §807.364. Ex Parte Consultations §807.365. Hearing Decision and Final Review by the Commission §807.366. Cease and Desist Order The subchapter is relettered to accommodate the insertion of new Subchapter S, Sanctions. SUBCHAPTER U. CAREER SCHOOLS HEARINGS The Commission proposes new Subchapter U as follows: New Subchapter U, regarding Career Schools Hearings, retains the following sections of repealed Subchapter T, Career Schools Hearings, in their entirety: §807.381. Purpose §807.383. Information on Right of Appeal §807.384. Request for Hearing §807.385. Setting of Hearing §807.386. Hearing Officer Independence and Impartiality §807.387. Hearing Procedures §807.388. Postponements, Continuances, and Withdrawals §807.389. Evidence §807.390. Ex Parte Communications §807.391. Change in Determination §807.392. Hearing Decision §807.393. Motion for Reopening §807.394. Motion for Rehearing §807.395. Finality of Decision The subchapter is relettered to accommodate the insertion of new Subchapter S, Sanctions. PART III. IMPACT STATEMENTS Randy Townsend, Chief Financial Officer, has determined that for each year of the first five years the rules will be in effect, the following statements will apply: There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules. There are no estimated reductions in costs to the state and to local governments as a result of enforcing or administering the rules. There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

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There are no foreseeable implications relating to the costs or revenues of the state or local governments as a result of enforcing or administering the rules. There are no significant, probable economic costs to persons required to comply with the rules. There is no estimated adverse economic effect on small businesses. There is no significant, estimated adverse economic effect on small businesses as a result of adopting the rules. Richard C. Froeschle, Director of Labor Market and Career Information, has determined that there is no significant negative impact upon employment conditions in the state as a result of the rules. Laurence M. Jones, Director, Workforce Development Division, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to clarify regulatory requirements for career schools and colleges, to clarify regulatory requirements for career schools and colleges, assist the Agency to exercise its regulatory authority as efficiently as possible, and provide career school and college students with enhanced information about institutions' performance and recourse for complaints. The Agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the Agency's legal authority to adopt. PART IV. COORDINATION ACTIVITIES In the development of these rules for publication and public comment, the Commission sought the involvement of Texas's 28 Local Workforce Development Boards. The Commission provided a concept paper regarding these rule amendments to the Boards for consideration and review on June 28, 2011. During the rulemaking process, the Commission considered all information gathered in order to develop rules that provide clear and concise direction to all parties involved. Comments on the proposed rules may be submitted to TWC Policy Comments, Workforce Policy and Service Delivery, attn: Workforce Editing, 101 East 15th Street, Room 440T, Austin, Texas 78778; faxed to (512) 475-3577; or e-mailed to TWCPolicyComments@twc.state.tx.us. The rules are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities. The proposed rules affect Title 4, Texas Labor Code, particularly Chapters 301 and 302, as well as Texas Education Code, Chapter 132.

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CHAPTER 807. CAREER SCHOOLS AND COLLEGES

SUBCHAPTER A. GENERAL PROVISIONS

§807.2. Definitions.

In addition to the definitions contained in §800.2 of this title, the following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.

(1) Academic quarter--A period of instruction that includes at least ten weeks of

instruction, unless otherwise approved by the AgencyCommission. (2) Academic semester--A period of instruction that includes at least 15 weeks of

instruction, unless otherwise approved by the AgencyCommission. (3) Academic term--An academic quarter, academic semester, or other progress

evaluation period. (4) Academically related activity--An exam, tutorial, computer-assisted

instruction, academic counseling, academic advisement, turning in a class assignment, or attending a study group that is assigned by the institution, or other activity as determined by the AgencyCommission.

(5) Accountant--An independent certified public accountant properly registered

with the appropriate state board of accountancy. (6) Act--Texas Education Code, Chapter 132, Career Schools and Colleges. (7) Advertising--Any affirmative act designed to call attention to a school or

program for the purpose of encouraging enrollment. (8) Agency--The unit of state government established under Texas Labor Code,

Chapter 301, that is presided over by the Commission and administered by the executive director to operate the integrated workforce development system and administer the unemployment compensation insurance program in this state as established under the Texas Unemployment Compensation Act, Texas Labor Code Annotated, Title 4, Subtitle A, as amended. The definition of Agency shall apply to all uses of the term in rules contained in this chapter.

(9) Appellant--The party or the party's authorized hearing representative who files

an appeal from an appealable determination or decision. (10)(8) Asynchronous distance education--Distance education training that the

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AgencyCommission determines is not synchronous. (11)(9) Class or course--An identifiable unit of instruction that is part of a

program of instruction. (12) Commission--The body of governance of the Texas Workforce Commission

composed of three members appointed by the governor as established under Texas Labor Code §301.002 that includes one representative of labor, one representative of employers, and one representative of the public. The definition of Commission shall apply to all uses of the term in rules contained in this subchapter.

(13)(10) Coordinating Board--The Texas Higher Education Coordinating Board. (14)(11) Course of instruction--A program or seminar. (15)(12) Course time--A course or class period that is:

(A) a 50-minute to 60-minute lecture, recitation, or class, including a laboratory class or shop training, in a 60-minute period;

(B) a 50-minute to 60-minute internship in a 60-minute period; or (C) 60 minutes of preparation in asynchronous distance education.

(16) Date of notice--The date the notice is received, unless good cause exists for the

hearing officer to determine otherwise. (17) Date of request of hearing--The date on which the appellant or the hearing

representative filed a written notice of appeal with the Agency by hand delivery, facsimile, or mail. If an appeal is mailed to the Agency, then the appeal is perfected as of the postmark date on the envelope containing the appeal request unless good cause exists for the hearing officer to determine otherwise. If an appeal is delivered by hand or facsimile after 5:00 p.m., the date of request shall be the next day.

(18)(13) Distance education course--Either a seminar or a program that is offered to non-residence school students via correspondence or other media from a remote site on a self-paced schedule, excluding programs using interactive instruction.

(19)(14) Distance education school--A school that offers only distance education

courses. (20)(15) Employment--A graduating or graduate student's employment in the same

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or substantially similar occupation for which the student was trained. (21)(16) Good reputation--The possession of honesty and truthfulness,

trustworthiness and reliability, and a professional commitment to the educational process and the training or preparing of a person for a field of endeavor in a business, trade, technical, or industrial occupation, as well as the condition of being regarded as possessing such qualities. In determining whether a person is of good reputation, the Agency is not limited to the following acts or omissions. The Agency may consider similar acts or omissions and rehabilitation efforts in response to prior convictions in making its determination. A person is considered to be of good reputation if the person:

(A) has never been convicted of a felony or any other crimerelated to the

operation of a school, and the person has been rehabilitated, including completion of parole or probation, from any other convictions that would constitute risk of harm to the school or students as determined by the AgencyCommission;

(B) has notnever been successfully sued for fraud or deceptive trade

practices, or breach of contract, within the last 10 years; (C) does not own or administer a school currently in violation of legal

requirements, has never owned or administered a school with repeated violations, and has never owned or administered a school that closed with violations including, but not limited to, unpaid refunds; orand

(D) has not knowingly falsified or withheld information from the

AgencyCommission.

(22) Hearing--An informal, orderly, and readily available proceeding held before an impartial hearing officer. A party or hearing representative may present evidence to show that the Agency's determination should be reversed, affirmed, or modified.

(23) Hearing officer--An Agency employee designated to conduct impartial

hearings and issue final administrative decisions. (24) Hearing representative--Any individual authorized by a party to assist the party

in presenting the party's appeal. A hearing representative may be legal counsel or another individual. Each party may have a hearing representative to assist in presenting the party's appeal.

(25)(17) Job placement--An affirmative effort by the school to assist the student in

obtaining employment in the same or substantially similar stated occupation for which the student was trained.

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(26)(18) Master student registration list--A comprehensive list with an entry made

for any person who signs an enrollment agreement, makes a payment to attend the school, or attends a class. The entry shall be made on the date the first of these events occurs.

(27) Party--The person or entity with the right to participate in a hearing authorized

in applicable statute or rule. (28)(19) Program or program of instruction--A postsecondary program of

organized instruction or study that may lead to an academic, professional, or vocational degree, certificate, or other recognized educational credential.

(29) Refund--The completed payment of a refund such that the refund instrument

has been negotiated or credited into the proper account(s). (30)(20) Reimbursement contract basis--A school operating, or proposing to

operate, under a contract with a state or federal entity in which the school receives payment upon completion of the training.

(31)(21) Residence school--A school that offers at least one program that includes

classroom instruction or synchronous distance education. (32) Sanctions--Administrative or civil actions, including, but not limited to,

penalties, revocation of approvals, or cease and desist orders taken by the Agency against an entity in response to violations of the Act or this chapter.

(33)(22) School--A "career school or career college," as defined in the Act, that

includes each location where courses of instruction shall be offered. (34)(23) Secondary education--Successful completion of public, private, or home

schooling at the high school level or obtainment of a recognized high school equivalency credential.

(35)(24) Seminar--A course of instruction that enhances a student's career, as

opposed to a program that teaches skills and fundamental knowledge required for a stated occupation. A seminar may include a workshop, an introduction to an occupation or cluster of occupations, a short course that teaches part of the skills and knowledge for a particular occupation, language training, continuing professional education, and review for postsecondary examination.

(36)(25) Seminar school--A school that offers only seminars. (37)(26) Small school--A "small career school or college" as defined in the Act.

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(38)(27) Stated occupation--An occupation for which a program is offered that:

(A) is recognized by a state or federal law or by a state or federal agency as existing or emerging;

(B) is in demand; and (C) requires training to achieve entry-level proficiencies.

(39)(28) Student--Any individual solicited, enrolled, or trained in Texas by a

school. (40)(29) Suspension of enrollments--A Commission sanction that requires the

school to suspend enrollments, re-enrollments, advertising, and solicitation, and to cease, in any way, advising prospective students, either directly or indirectly, of the available courses of instruction.

(41)(30) Synchronous distance education--The AgencyCommission may determine

distance education to be synchronous under the following conditions:

(A) The training is conducted simultaneously in real time, or the training is conducted so that the manner of delivery ensures that even if the instructor and student are separated by time, the course time of instruction that the student experiences can be determined; and

(B) There is consistent interaction between the student(s) and the instructor

on a schedule that includes a definite time for completion of the program and periodic verifiable student completion/performance measures that allow the application of the progress standards of Subchapter L and attendance standards of Subchapter M of this chapter.

(42)(31) Title IV school--A career school or college that participates in student

financial aid programs under Title IV, Higher Education Act of 1965 (20 U.S.C. Section 1070 et seq.).

(43)(32) Tour--A required, in-personAn inspection of the facilities and equipment

pertaining to a course of instruction. (44)(33) Week--Seven consecutive calendar days.

§807.8. Confidentiality of Information.

All student-specific information obtained from or about any school by the Agency, including, but not limited to, data submitted under §807.284(a), is confidential information and not releasable, and is not public information under Texas Government

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Code, Chapter 552, but may be compiled and reported to the public at a summary level of information that does not include the personally identifiable information of any student or allow for the identification of any student through combination with other publically available information.

SUBCHAPTER B. CERTIFICATES OF APPROVAL

§807.17. Penalties and Sanctions Regarding Schools.

The Commission may impose penalties or sanctions for violations of the Act or this chapter, including:

(1) collecting a late renewal fee from the school; (2) denying the school's application for a certificate of approval; (3) revoking the school's certificate of approval; (4) placing restrictions on the school's certificate of approval; (5) denying, suspending, or revoking the registration of the school's representatives; (6) collecting a late refund penalty from the school; (7) assessing an administrative penalty; (8) applying for an injunction against the school; (9) asking the Attorney General to collect a civil penalty from any person who

violates the Act or this chapter; (10) ordering a peer review of the school; (11) revoking a program approval; (12) denying a program approval; (13) requiring full or partial refunds to students for program violations or

deficiencies; (14) suspending the admission of students to the school; (15) charging the school an investigation fee to resolve a complaint against the

school; and (16) charging the school interest and penalties on late payments of fee installments.

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§807.17. Unlicensed Schools.

If a career school or college, as defined in the Act, operates, solicits, or enrolls students, or conducts any course of instruction before receiving a certificate of approval or an exemption from the Agency, the Agency may:

(1) assess a penalty; (2) require full refunds to all students; or (3) issue a cease and desist order.

SUBCHAPTER D. REPRESENTATIVES

§807.51. Representative Requirements.

(a) The school shall apply annually to register representatives on forms provided by the AgencyCommission and with the appropriate fee.

(b) A representative shall be of good reputation and under the control of the school and

is deemed to be the agent of the school. The school is responsible for any representations or misrepresentations, expressed or implied, made by a representative.

(c) Any student solicited or enrolled by an unregistered representative is entitled to a

refund of all monies paid and a release from all obligations to the school. Any contract signed by a prospective student as a result of solicitation or enrollment by an unregistered representative is null and void and unenforceable.

(d) Representatives shall participate in training approved by the Agency that covers the

Act and Commission rules relative to representatives, admissions, advertising, and any other topics as required by the Agency to support the legal and ethical solicitation and enrollment of students.

§807.54. Representative Compliance. The Agency may hold representatives liable for violations of statute, Commission rules, policies, and procedures notwithstanding §807.51(b) of this subchapter. Violations may result in sanctions up to and including revocation of approval to serve as a representative in Texas, in accordance with the matrix below:

GRADUATED CORRECTIVE ACTIONS

Sanction to Representative (to serve as a

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representative in a school licensed in Texas) Initial Violation Conditional registration and retraining Multiple Violations Suspension of registration and retraining Repeat Violation Revocation or denial of registration Felony Conviction Denial, suspension, or revocation of registration

VIOLATIONS

Representative Approval

Soliciting or enrolling students without registration as a representative Failure to provide required or accurate information in the representative registration application Soliciting or enrolling students for multiple schools, without agreement of all school owners Soliciting or enrolling students without taking required training

Representative Behavior

Misrepresentation of the school's programs Providing incomplete or inaccurate information about the school (such as employment outcomes, extent of transferability of credits) Discrediting other schools Soliciting students in disallowed locations Soliciting or enrolling students into unapproved programs Offering students financial inducements to enroll Coercing students to enroll Administering entrance tests Advising students on financial aid Soliciting as, or on behalf of, an employment agency Failing to invite students to tour the school's facility and inspect the equipment Violating any other provision of statute or rule relating to career schools and colleges

SUBCHAPTER F. INSTRUCTORS

§807.82. Temporary Instructors.

(a) The AgencyCommission may allow a school to use a previously unapproved instructor to teach temporarily for a reasonable amount of time in the case of an emergency, as determined by the AgencyCommission.

(b) In such circumstances, the school shall provide written notice to the

AgencyCommission delivered no later than the first day the temporary instructor begins teaching. The notice shall include:

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(1) the class to be taught; (2) the name of the approved instructor; (3) the name of the temporary instructor; and (4) the reason for the temporary instructor.

(c) Failure to properly notify the AgencyCommission shall result in sanctionspenalties for the use of an unapproved instructor.

(d) The temporary instructor shall have practical experience or education in the course

area to be taught, and shall not have been previously disapproved to teach the class. (e) There shall be no more than one temporary instructor per grading period in an

individual class, unless specifically approved in advance by the AgencyCommission. (f) Failure to comply with this section shall result in sanctions, penalties, up to and

including, a full refund to all students attending such classes, or both.

Subchapter H. COURSES OF INSTRUCTION §807.134. SanctionsPenalties Relating to Courses of Instruction.

(a) If an approved course of instruction is discontinued for any reason, the AgencyCommission shall be notified within 72 hours of discontinuance and furnished with the names and addresses of any students who were prevented from completion of the course of instruction due to discontinuance. Should the school fail to make arrangements satisfactory to the students and the AgencyCommission for the completion of the course of instruction, the full amount of all tuition and fees paid by the students are then due and refundable. Any course of instruction discontinued will be removed from the list of approved courses of instruction.

(b) The AgencyCommission may suspend enrollments in a particular course of

instruction at any time the Commission finds cause. For purposes of this subsection, cause includes, but is not limited to: (1) inadequate instruction; (2) unapproved or inadequate curriculum; (3) inadequate equipment; or (4) inadequate facilities.

(c) If a school begins teaching a course of instruction or revised course of instruction

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that has not been approved by the AgencyCommission, the AgencyCommission may require the school to refund to the enrolled students all or a portion of the tuition fees.

(d) If upon review and consideration of an original, renewal, or revised application for

course of instruction approval, the AgencyCommission determines that the applicant fails to meet the requirements in the Act or this chapter, the AgencyCommission shall notify the school, setting forth in writing the reasons for the denial. This may include summaries of peer evaluations from both educators and employers offering similar courses of instruction.

(e) The AgencyCommission may revoke approval of a school's course of instruction at

any time the AgencyCommission finds cause. For purposes of this subsection, cause includes, but is not limited to:

(1) any statement contained in the application for the course of instruction

approval which is untrue; (2) the school's failure to maintain the instructors, facilities, equipment, or courses

of instruction, or course of instruction outcomes on the basis of which approval was issued;

(3) advertising made on behalf of the school which is false, misleading, or

deceptive, including those that use the wordsword commonly associated with "associate" to describe a degree other than those approved by the Coordinating Board;

(4) courses of instruction without clearly stated limited transferability if there are

no articulation agreements with other postsecondary institutions in the same geographic area;

(5) courses of instruction for which financial aid is advertised but is not available; (6) repeated violations by the school that negatively impact the quality of a

particular course of instruction; or (7) violations by the school of any applicable provision of the Act or this chapter.

(f) A school whose course of instruction approval is denied or revoked shall have the

right to appeal. The AgencyCommission will conduct hearings in accordance with AgencyCommission policies and procedures applicable to the appeal.

SUBCHAPTER N. CANCELLATION AND REFUND POLICY

§807.261. Requirement for TourRight to Cancel after Tour.

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(a) Notwithstanding subsection (b) of this section, schools are required to provide a tour on or before the first scheduled class day.

(b)(a) Distance education, combination distance education-residence, and seminars are

not required to provide the student a tour. (c)(b) Any potential student who has not been provided the opportunity to tour the school

facilities and inspect the equipment before signing an enrollment contract has an additional three days, excluding Saturdays, Sundays, and legal holidays, following a tour and inspection to cancel enrollment and request a full refund of any money paid to the school and release from all obligations. The student shall sign and date an acknowledgement form certifying the completion of the tour.

§807.262. Completion Consummation of Refund.

(a) A school shall document refunds by written record indicating the date of the refund

transaction, the name of the student receiving the refund, the total amount refunded, and the specific reason for the refund. Proof of completion consummation shall be on file within 120 days of the effective date of termination and shall include:

(1) copies of both sides of the cancelled check; (2) printed proof of completed transaction of electronic funds transfer or other

similar electronic means; or (3) documentation of an awarded credit to a credit card or other similar account.

(b) To ensure a school's good faith effort to timely complete consummate a refund owed directly to a student, the student's file shall contain evidence of the following proof of a certified mailing of the refund to the:

(1) student's last known address; (2) student's permanent address, if different from the student's last known address;

or

(3) address of the student's parent or legal guardian, if different from the student's last known and permanent addresses.

(c) If after making a good faith effort to timely completeconsummate a refund, the

school is unable to completeconsummate the refund, the school shall forward to the AgencyCommission the appropriate refund amount and any pertinent student information to assist the AgencyCommission in locating the student.

§807.263. Refund Requirements.

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(a) Students are entitled to a full refund for classes attended if the school does not provide a class with:

(1) does not provide a class with:

(A)(1) an approved instructor; (B)(2) an instructor for whom an application has been properly submitted

to the Agency Commission; or (C)(3) a temporary instructor for whom the school submitted notice to the

Agency;Commission.

(2) fails to maintain the instructors, facilities, equipment, or courses of instruction on the basis of which Agency approval was issued or student enrollment was obtained;

(3) violates any provision of this chapter in the process of soliciting and enrolling

the student; (4) fails to adhere to applicable academic, attendance, and refund policies that

meet state requirements and apply to the course enrolled in, as published at the time of the student's enrollment in the course;

(5) fails to furnish the student, upon satisfactory completion of the program, with a

certificate of completion. A school may withhold the transcript or certificate until the student has paid outstanding financial obligations to the school; or

(6) does not have course approval or the required certificate of approval from the

Agency.

(b) If any of the violations in subsection (a)(1) - (6) of this section apply to a class has no instructor for more than one class period, students are entitled to a full refund for each such class attended.

(c) The length of a program, for purposes of calculating refunds owed, is the shortest

scheduled time period in which the program may be completed by continuous attendance of a full-time student.

(d) A non-Title IV school, or a Title IV school voluntarily taking attendance, shall

calculate refunds for students based upon scheduled hours of classes through the last date of attendance. A Title IV school shall calculate refunds for students based upon scheduled hours of classes through the last documented day of an academically related activity. Neither type of school shall count leaves of absence, suspensions,

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school holidays, days when classes are not offered, and summer vacations for purposes of calculating a student's refund.

(e) For all schools other than distance education and seminars, a student may cancel

enrollment, request a full refund, and request a release from any obligations to the school within the first three scheduled class days., excluding Saturdays, Sundays, and legal holidays following: (1) the first day of the student's scheduled classes if the student is not provided an

opportunity to tour the school facilities, which includes inspection of equipment, before signing an enrollment contract; or

(2) the day the tour of the school facilities, including inspection of the equipment, is

completed, when provided before the first day of the student's scheduled classes.

(f) Students are entitled to a refund paid in accordance with the school's policy, which

must provide for refunds at least equivalent to the provisions in §132.061 of the Act, if students withdraw or are discontinued from a program prior to completion.

§807.264. Penalties Relating to Refunds.

(a) A penalty shall be paid on any refund not completedconsummated in a timely manner as required by the Act. The penalty assessment shall begin on the first day following the expiration of the statutorily defined refund period and end on the day preceding the date the refund is completedconsummated.

(b) Penalties assessed on late refunds for grants shall be paid to the tuition trust account

if the amount is $15 or less. Any other penalty assessed on a school's late payment of student refunds shall be disbursed in the following order of priority:

(1) to the student's account at a lending institution for the balance of principal and

interest on the student loan; (2) to the student for tuition and fees paid directly by the student; and (3) to the tuition trust account for any remaining balance of assessed penalty.

(c) If the Agency Commission determines that the method used by the school to

calculate refunds is in error or the school does not routinely pay refunds within the time required by the Act, the school shall submit an audited report conducted by an accountant of the refunds due former students that includes any penalty due as specified in the Act. An audit opinion letter shall accompany a schedule of student refunds due, which discloses the following information for the four years prior to the date of the Agency's Commission's request:

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(1) student information, including name, address, and Social Security social

security number; (2) pertinent dates, including last date of attendance and date of termination; and (3) refund information, including amount of refund with principal, penalty, and

any balance due separately stated, payee, and date and check number of payment if payment has been made.

SUBCHAPTER O. RECORDS

§807.284. Employment Records.

(a) A school offering programs approved for an occupational objective shall complete the labor market information survey on forms provided by the Commission and submit them on or before the date provided in the survey packet as requested by the Commission.

(b) A school shall report program completion, job placement, and employment data on an

annual basis in each program approved for an occupational objective.

(1) The school shall provide the data in a form acceptable to the Commission.

(2) Verifiable documentation shall be made available for review to support data reported. The documentation shall include the names of graduates and the names, addresses, and telephone numbers of their employers.

§807.284. Reporting.

(a) Schools shall report to the Agency, as directed, the facts and information about their

programs and operations deemed necessary for the proper administration of the Act and any rules adopted under the Act.

(1) The data to be reported by a school shall include:

(A) student enrollment information for all programs; (B) completion, employment, and job placement information for all programs

approved for an occupational objective; and (C) any other required information.

(2) The school shall submit the required data to the Agency on or before the

specified date.

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(3) The school shall provide the data in an electronic format prescribed by the

Agency unless a different format is approved in writing by the Agency. (4) When good cause is shown, the Agency may extend the deadline for

submission of the data required under this section; however, the extension shall be effective only if authorized in writing.

(5) The Agency may require schools to maintain on file the verifiable

documentation supporting the data reported and make it available to the Agency upon request.

(b) The Agency shall develop and apply data monitoring and audit protocols for the data

reported under subsection (a) of this section, in a manner sufficient to reasonably determine the accuracy of the reported information.

(c) The Agency may impose penalties or sanctions, or both, for failure to submit data

under subsection (a) of this section by the due dates required, or for submission of data that is shown to contain inaccuracies.

(d) For any programs not meeting a minimum employment rate for program graduates

in jobs related to the stated occupation, as referenced in §807.131(b), the following graduated corrective actions will be taken: (1) For a program not meeting the minimum employment rate for the first year, the

school will be required to develop and submit a performance improvement plan acceptable to the Agency;

(2) For a program not meeting the minimum employment rate for the second

consecutive year, but showing at least a 50% improvement toward the minimum employment rate of the previous year, the school will be required to reexamine and submit modifications to the performance improvement plan acceptable to the Agency;

(3) For a program not meeting the minimum employment rate for the second

consecutive year and not showing at least a 50% improvement toward the minimum employment rate of the previous year, conditions will be placed on the school's certificate, which include:

(A) modification of the performance improvement plan; and

(B) suspension of new enrollment of students funded with Local Workforce

Development Board–allocated funds in the program; and (4) For a program not meeting the minimum employment rate for the third

consecutive year, the Agency will revoke approval of the program.

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(e) The Agency shall publish on its website information compiled from:

(1) data reported under subsection (a) of this section; and (2) any other information collected about schools and programs deemed

appropriate and useful to the public, which:

(A) assists a person in deciding whether to enroll in a school or in identifying or choosing which postsecondary institution, school, or college to attend; and

(B) addresses regulatory compliance and performance of schools.

(3) The Agency, to the extent practical, shall present the published information in

a manner that is consistent among institutions, schools, and colleges; easy to understand; and accessible to the public.

SUBCHAPTER P. COMPLAINTS

§807.302. Complaints and Investigations.

(a) The Agency shall investigate or refer to other authorities with jurisdiction to investigate, as appropriate, all complaints received about a school, whether licensed or unlicensed.

(b)(a) The Agency Commission may investigate a complaint about a school and may

determine the extent of investigation needed by considering various factors, such as:

(1) the seriousness of the alleged violation; (2) the source of the complaint; (3) the school's history of compliance and complaints; (4) the timeliness of the complaint; and (5) the feasibility of investigations; and (6)(5) any other reasonable matter deemed appropriate.

(c)(b) The AgencyCommission may require adequate documentation or other evidence

of the violation before initiating a complaint investigation. Notwithstanding subsection (a) of this section, anonymous complaints will not be investigated but will be reviewed to identify any action needed.

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(d) Unless good cause is shown, a complaint is timely only if it is filed with the Agency while the student who files the complaint is enrolled or within two years of the date the student withdraws, terminates, or graduates from the program that is the subject of the complaint. Good cause includes, but is not limited to, fraud.

(e)(c) The investigation fee authorized by the Act is based on a per site visit. The

school director shall be notified that an on-site visit was conducted when the investigation results in assessment of a fee.

SUBCHAPTER S. SANCTIONS

§807.351. Notice and Administration of Sanctions.

(a) Pursuant to its authority under §132.152 of the Act, the Agency may impose administrative penalties or other sanctions on an entity for violations of §132.151 of the Act or this chapter.

(b) The Agency shall serve notice of a sanction, with determination of the violation on

which it is based, by both U.S. mail and certified mail, return receipt requested, mailed to the owner's address of record as listed on the application for certificate of approval. Unless there is other evidence of receipt, notice is presumed received five days from the date it is mailed by the Agency.

(c) In imposing administrative penalties or other sanctions, the Agency shall consider all

the factors that it deems relevant, including, but not limited to, the following:

(1) The amount of administrative penalty or level of sanction necessary to ensure immediate and continued compliance with statutes and regulations;

(2) The conduct of the entity in taking all reasonable steps or procedures necessary

and appropriate to comply with statutes and regulations and to correct the violation; and

(3) The entity's prior violations of statutes, regulations, or orders administered,

adopted, or issued by the Commission.

(d) Notwithstanding subsections (a) - (c) of this section, the Agency shall order refunds pursuant to applicable statute and rules.

§807.352. Sanctions.

(a) Sanctions may include:

(1) administrative penalties outlined in §807.353; (2) collecting a late renewal fee from the school;

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(3) denying the school's application for a certificate of approval; (4) revoking the school's certificate of approval; (5) placing conditions on the school's certificate of approval; (6) suspending the admission of students to the school or a program; (7) denying a program approval; (8) revoking a program approval;

(9) denying or revoking approval of an owner, school director, instructor, or other

staff member whose approval may be required;

(10) denying, suspending, or revoking the registration of the school's representatives;

(11) assessing a late refund penalty; (12) charging the school an investigation fee to resolve a complaint against the

school; (13) charging the school interest and penalties on late payments of fee installments; (14) applying for an injunction against the school; (15) asking the attorney general to collect a civil penalty from any person who

violates the Act or this chapter; (16) ordering a peer review of the school; and (17) issuing a cease and desist order to an unlicensed school.

(b) Notwithstanding subsection (a)(1) - (17) of this section, the Agency shall order

refunds pursuant to violations of applicable statutes and rules. §807.353. Administrative Penalties.

(a) Unless otherwise provided by statute, an administrative penalty shall not exceed

$1,000 for each instance of a violation. (b) Regardless of the penalty amount for a particular violation contained in the penalty

matrix, the administrative penalty for repeat violations shall be up to the maximum penalty amount of $1,000 per violation.

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(c) The total amount of an administrative penalty shall be calculated as the product of

the penalty dollar amount and the number of instances of violation.

(d) The assessment of an administrative penalty shall not preclude the Agency from administering other sanctions, up to and including revocation of a school's certificate of approval.

(e) For the purposes of determining and assessing an administrative penalty, the Agency

shall use the penalty matrix below. The absence of a particular violation from the matrix shall not preclude the Agency from assessing an administrative penalty.

Violation Penalty

Small school transitioning to a large school: • Failure to notify Agency of the school's status change; • Failure to timely apply; or • Failure to remit increased fees.

$250

Failure to disclose tuition, fees, or other charges, including increases, to the Agency

$250

Vacating the school facility without providing prior notification of a change of address

$250

Failure to maintain records demonstrating compliance $250

Failure to provide complete and accurate information as required $250

Failure to ensure representatives have taken required training $500

Failure to provide instructors who meet necessary qualifications and notice requirements

$500

Failure to make arrangements satisfactory to the Agency for the completion of a discontinued course of instruction

$500

Failure to respond to requests or direction from the Agency $500

Making a false statement in an application to the Agency $500

Failure to maintain the instructors, facilities, equipment, or courses of instruction and outcomes on the basis of which approval was issued

$500

Failure to disclose limitations on transferability of courses of instruction $500

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Advertising the availability of financial aid for a program for which it is not available

$500

Failure to establish that students met the approved admission requirements $750

Failure to submit the annual program completion, job placement, and employment data by the required due date

$750

Failure to submit annual financial statements no later than 180 days from the close of the school's or college's fiscal year

$750

Transfer of students from one school location to another school location, by an owner with multiple school locations

$750

Suspension of all classes and dismissal of all students contrary to the school's class schedule as printed in the school catalog for reasons not approved by the Agency

$750

Operating a school without a certificate $1,000

Teaching a course of instruction or revised course of instruction that has not been approved by the Agency

$1,000

Using advertising that is false, misleading, or deceptive, including the misrepresentation of degrees other than those approved by the Coordinating Board

$1,000

Failure to notify the Agency of the discontinuance of the course of instruction or the operation of a school or college within 72 hours of cessation of classes, and to make available accurate records as required

$1,000

Solicitation of prospective students in violation of statutory and rule requirements

$1,000

Misrepresentation $1,000

Failure to file a complete application for renewal at least 30 days before the expiration date of the certificate of approval

10% of renewal fee not less than $200 and not more than $1,000

Failure to pay any installment by the required due date 50% of the total amount of the fee

Paying refunds late A rate established annually by the

Commission

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SUBCHAPTER S. CEASE AND DESIST ORDERS

§807.361. Statement of Charges and Notice of Hearing on Cease and Desist Orders.

If the Agency believes a person is operating a career school or college without a certificate of approval in violation of §132.151 of the Act, the Agency may issue a statement of charges and notice of hearing to consider the issuance of a cease and desist order.

§807.362. Contents of Statement of Charges and Notice of Hearing.

The statement of charges and notice of hearing issued by the Agency shall contain the following information:

(1) The name and last known address of the person against whom the order may be

entered; (2) A short and plain statement of the reasons the Agency believes the person is

operating a career school or college without a certificate of approval; (3) A copy of the Commission's Career Schools and Colleges rules, Title 40,

Chapter 807 of the Texas Administrative Code; and (4) The date, time, and location of the hearing.

§807.363. Service of Statement and Charges and Hearing Notice for the Issuance of

Cease and Desist Orders.

The statement of charges and notice of hearing to consider a cease and desist order shall be served by certified mail, return receipt requested, on the person against whom the order is entered. Notice is presumed received five days from the date it is mailed by the Agency.

§807.364. Ex Parte Consultations.

(a) A Commissioner or employee of the Agency assigned to render a decision or to

make findings of fact and conclusions of law in a cease and desist proceeding shall not directly or indirectly communicate in connection with an issue of fact or law with the Commission, a person, a party, or a representative of those entities, except on notice and opportunity for each party to participate.

(b) A Commissioner or employee of the Agency assigned to render a decision or to

make findings of fact and conclusions of law in a cease and desist hearing may communicate ex parte with an Agency employee who has not participated in a hearing in the case for the purpose of using the special skills or knowledge of the

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agency and its staff in evaluating the evidence. (c) This section shall be construed liberally to promote the effectiveness and efficiency

of issuance of cease and desist orders.

§807.365. Hearing Decision and Final Review by the Commission.

(a) Within 10 days after the hearing is held, the hearing officer shall issue a written decision granting or denying the request for the issuance of a cease and desist order that includes findings of fact and conclusions of law. The hearing decision shall be mailed by certified mail, return receipt requested, and is presumed received five days from the date it is mailed. The hearing officer's decision becomes final the 15th day after receipt of the hearing decision unless an appeal is filed under subsection (b) of this section.

(b) A party that is not satisfied with the decision of the hearing officer may file a written

appeal of the decision to the Commission for a final review no later than the 15th day after receipt of the hearing decision. The written appeal shall contain the party's arguments as to why the decision of the hearing officer should be reversed. A party may request oral argument on the written appeal before the Commission. If oral argument is approved, each party or its hearing representative may present argument in support of its position.

(c) Upon receipt of the written appeal of the hearing officer's decision, the Commission

shall consider the appeal and issue a decision promptly. If in the written appeal, oral argument is requested by a party and approved, the Commission shall schedule and hold oral argument not later than 90 days of receipt of the written appeal. The Commission shall consider the appeal on the basis of the record made before the hearing officer. The decision of the Commission shall be mailed by certified mail, return receipt requested, and is presumed received 5 days from the date it is mailed.

§807.366. Cease and Desist Order.

(a) If the request for the issuance of a cease and desist order becomes final under the

provisions of §807.365(a) or, if after an appeal the decision under §807.365(c) upholds the issuance of a cease and desist order by the Commission, the hearing officer shall issue a cease and desist order against the person that is found operating a career school or college without a certificate of approval in violation of §132.151 of the Act.

(b) The cease and desist order shall be delivered by certified mail, return receipt

requested, and is presumed received five days from the date it is mailed. (c) From the date of receipt of the issuance of the cease and desist order, the person

must completely cease and desist operating the career school or college.

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(d) The cease and desist order shall remain in effect until the person comes into complete compliance with the Act as determined by the Commission, or unless otherwise provided by the order of the Commission.

SUBCHAPTER T. CEASE AND DESIST ORDERS

§807.361. Statement of Charges and Notice of Hearing on Cease and Desist Orders.

If the Agency believes a person is operating a career school or college without a certificate of approval in violation of §132.151 of the Act, the Agency may issue a statement of charges and notice of hearing to consider the issuance of a cease and desist order.

§807.362. Contents of Statement of Charges and Notice of Hearing.

The statement of charges and notice of hearing issued by the Agency shall contain the following information:

(1) The name and last known address of the person against